In Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), the Supreme Court held in a 5-4 decision that a plaintiff seeking certification for a damages class under Rule 23(b)(3) must establish that damages are capable of being measured on a class-wide basis.
The Court found that the lower court erred when it failed to consider the sufficiency of plaintiffs’ damages proof—a key inquiry that “bore on the propriety of class certification”—simply because defendants’ arguments overlapped with the merits of the case. 133 S. Ct. at 1432-33. At issue was plaintiffs’ proposed damages model, which was calculated assuming the validity of all four theories of antitrust impact initially advanced by plaintiffs, even though the district court ultimately accepted only one of them. Because a model purporting to serve as evidence of damages must measure only those damages attributable to the theory, the Court reasoned, plaintiffs’ proposed model—which was incapable of isolating damages resulting from any one theory—could not “possibly establish that damages are susceptible of measurement across the entire class for purposes of Rule 23(b)(3).” Id. at 1433.
In applying Rule 23(b)(3)’s predominance and “evidentiary proof” requirement to the calculation of damages, the Court thus made clear that plaintiffs must have a sufficiently rigorous and developed class-wide damages model to get past the class certification stage. To assess the initial impact of Behrend, it is worth keeping an eye on Whirlpool v. Glazer, 678 F.3d 409 (6th Cir. 2012), a consumer class action certification case that the Court recently remanded to the Sixth Circuit for review in light of Behrend.
An in-depth Advisory on Behrend published by Arnold & Porter attorneys is available here.